Wenzhou, Zhejiang – Huafon Spandex, the Shenzhen-listed elastane arm of China’s polyurethane heavyweight Huafon Group, estimates its unaudited annual net profit will shoot up to between CNY 1.5bn and CNY 1.8bn ($214m to $257m). This compares with CNY 445m annual profit in 2018, the company said.
The profit jump is a result of the financial consolidation of the group’s PU resin and polyester polyol subsidiary, Zhejiang Huafon New Materials. The elastane arm bought these from other shareholders for CNY 12bn in December 2019.
In 2018, the new materials business recorded CNY 1.37bn net profit on CNY 10.7bn revenue.
Huafon Spandex’s annual net profit less non-recurring items, such as the acquisition, will fall by up to 13% from 2018, the company said in a statement.
‘In 2019 the company was able to raise the production volume of differentiated products and increase its competitiveness against an elastane market with oversupply and a substantial price drop. Its profitability was among the top in the sector,’ the statement added.
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